Dogecoin price last week rallied by 150 percent, logging one of its most significant increases in a three-day timeframe.
The explosive upside move came as a part of a coordinated pump caused by a viral TikTok campaign.
Nevertheless, the DOGE/USD exchange rate crashed hard upon topping at circa $0.00569 on July 8.
Bitcoin firm Ryze made a strong case against Dogecoin following the dump, stating that the meme cryptocurrency is behaving like crypto frenzies from 2017.
Dogecoin serves as a reminiscent of 2017’s notorious crypto frenzy, according to Ryze.
The Atlanta-based bitcoin firm, which creates automated trading solutions for crypto traders, called Dogecoin for its shady price behavior last week. It noted that the meme cryptocurrency behaved almost like “pump-and-dump scams” that duped investors of millions of dollars in 2017.
In retrospect, the Dogecoin price last week rose by up to 150 percent in just three days of trading.
The catalyst that drove its rate explosively upward was TikTok, a short-form video app having 800 million users worldwide. One of its users, James Galante, made a joke video about sending Dogecoin to $1 if everyone invests at least $25 into it.
The message went viral, leading to a dramatic spike in the Dogecoin rates across multiple exchanges.
This tiktok I made the other day as a joke about Dogecoin went mega viral and now the crypto’s value is up 16% in the last 24hrs lol https://t.co/HimKE2VAD2
— James Galante (@Galante97) July 7, 2020
TikTok is the New Twitter
Ryze’s co-founder Abhay Aluri wrote in his weekly research note that daytraders used TikTok in the same way they used Telegram, Twitter, and Discord to pump-and-dump cryptocurrencies.
He further called the trend “dangerous” since it directly communicated with teenagers and younger adults with little-to-no experience in trading and investing.
“Young, inexperienced investors in their late teens/early 20’s heeding TikTok financial advice hoping to catch the next moonshot, can result in thousands of people getting burned and having a bad experience in crypto,” Mr. Aluri stated.
The concerns also heightened because of Dogecoin’s lack of use case. The cryptocurrency came to existence back in 2013 as a joke token. Its earlier days saw people spending it on making micropayments, such as tips and donations. It also served as a sponsor to NASCAR driver Josh Wise in 2014, which helped its popularity.
Dogecoin logo on NASCAR driver Josh Wise’s car. Source: Wikipedia
Nevertheless, Dogecoin failed to keep itself updated with the rest of the cryptocurrency market. Traders started losing interest as more attractive investment alternatives appeared in the form of Ethereum, EOS, Tezos, Chainlink, and others. Hence, it practically became a worthless token.
“Dogecoin was made in 2013 as a joke, it has no real use case,” Mr. Aluri asserted further.
Dogecoin Crashes 45%
As anticipated, the DOGE/USD pump failed to sustain itself beyond its yearly top of $0.00569.
The pair corrected lower extensively, falling by as much as 48.29 percent from the said level. Its next attempt to rise higher managed to add just 3 percent of gains to its rate. As of this time of writing, the DOGE/USD pair was trading 45 percent lower from its year-to-date high.
Dogecoin rally fizzles after topping out. Source: TradingView.com
But is it a signal of an extended downside correction? It cannot be foretold because of Dogecoin’s inclusion in the derivatives space.
OKEx last week announced that they are launching DOGE-enabled leveraged spot and perpetual swap contract trading. Its rival Binance also launched DOGE/USDT swap contracts. That practically makes Dogecoin more speculative than before, vulnerable to more pump-and-dumps in the future. origin »
It’s been an explosive week for the altcoin market, but not for Bitcoin. As Bitcoinist has extensively covered over recent days, a number of altcoins have surged higher. This list includes Dogecoin (DOGE), Chainlink (LINK), Synthetix (SNX), Cardano (ADA), and VeChain (VET).
After hitting a new two-year peak back in 2024, the Dogecoin price had trended downward, and the result of this was a move into a major accumulation trend. Since then, the meme coin has been caught in this accumulation trend, with the majority of the price action favoring a bearish market.
So far in history, the Dogecoin price has seen two major price rallies that have led the meme coin to reach brand new all-time highs. Given this trend, the expectations are that the cryptocurrency could be getting ready for another rally like the last two bear markets.
On-chain data shows the Dogecoin whales have participated in a significant amount of selling recently, a potential reason behind the memecoin’s decline. Dogecoin Whales Shed 440 Million Tokens Over Last 72 Hours As pointed out by analyst Ali Martinez in a new post on X, whales have reduced their Dogecoin supply over the past few days.
The negative market sentiment has spread rapidly, and the Dogecoin price continues to range around $0. 2 as a result. This puts the meme coin in a perilous position that could see its decline deepen from here.
The recent Dogecoin market action has seen its price now hovering below $0. 20 after surging to $0. 208 in the past 24 hours. Despite the consolidation, analysts and traders are watching the meme coin closely, believing that the next major move could redefine its long-term trajectory.
The cryptocurrency market is closely watching Dogecoin this week as Nate Geraci, chairman and president of The ETF Store, says the first Dogecoin ETF could launch very soon, possibly within days. Meanwhile, market analyst Javon Marks predicts that the memecoin could be on the edge of a massive rally, which may bring huge gains of more than 860 percent for holders.
Dogecoin is currently consolidating within a tight range, trading below the $0. 18 mark and holding support above $0. 16. Meme coins have faced significant selling pressure and uncertainty, struggling to gain momentum as the broader crypto market remains volatile.
